Lower economic growth target to stabilize the macro economy

(VOVworld) – International organizations such as the Asia Development Bank (ADB, the World Bank (WB), and the International Monetary Fund (IMF) have adjusted Vietnam’s economic growth target to 5%, which is lower than their estimate 4 months ago. Many economists say this growth rate is appropriate now because Vietnam is focusing now on stabilizing the macro-economy to prepare for future growth. Although Vietnam’s economic growth rate is lower this year, it is expected to improve next year. The organizations said that by curbing inflation, the Vietnamese government is on the right track to stimulate growth. One visible example is the loosening fiscal policy. Vietnam has expectedly decreased the interest rate, from 15% last year to 11% by the middle of this year. In addition to firm action to reduce bad debt, the government will continue to bolster weak banks next year to strengthen the banking system. The government is considering establishing a debt buying company that belongs to the State Bank and has total capital of 5 billion USD. Vietnam has accelerated economic restructuring, focusing on public investment. Minister of Planning and Investment Bui Quang Vinh elaborates: “According to the Party Central Committee’s resolution, the core of investment restructuring is public investment. The State allows private investment in more areas. It will reduce investment from its budget and government bonds and mobilize non-state investment resources. The State will increase support for the public-private partnership model.” Deferring value added tax has proven a positive step toward easing the difficulties of domestic…